Thread by @doctorow

The 3d Circuit #CourtOfAppeals has foiled #JohnsonAndJohnson's plan to use a bankruptcy scam called the #TexasTwoStep to escape paying 40,000 women whom the pharma giant sold carcinogenic, asbestos-tainted talcum to dust over their vulvas.

wxxinews.org/2023-01-30/app… 1/

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2023/02/01/j-a… 2/

Back in 2018, a jury awarded $4.69 billion to 22 women whose ovarian cancer was caused by J&J's toxic product, $4.14b of which was punitive. 3/

It was awarded because J&J ignored the link between applying talcum powder to one's genitals and cancer, and continued to market its products as a "Shower to Shower" genital deodorant:

cnn.com/2018/07/13/hea… 4/

With thousands more lawsuits in the pipeline, the company sprung into action, restructuring in Texas using a quirk of the state's merger laws that allows a single company to "merge" into two separate entities.

statutes.capitol.texas.gov/Docs/BO/htm/BO… 5/

The Texas Two-Step is a corrupt gambit using this quirk to allow large firms to escape liability for their misdeeds, by creating a company that holds the assets and profitable products, and another company that holds the toxic products and the liabilities they produced. 6/

The "bad" company then declares bankruptcy, leaving the "good" company to walk away with the billions it made by harming people, and leaving the victims to squabble over the meager assets from the bankruptcy. 7/

To maintain the pretense that this maneuver isn't just a ruse to escape liability, companies using the Texas Two-Step have the "good" company guarantee some of the liabilities of the "bad" company. That's what J&J did, and the women sued over it:

www2.ca3.uscourts.gov/opinarch/22200… 8/

The appeals court didn't find J&J's bankruptcy persuasive. They found that any bankruptcy for the "bad" company should come *after* it had exhausted all guarantees the "good" company had made. 9/

Summarizing the court opinion @business's @mattlevine writes, "You want to file for bankruptcy while you still have plenty of money to pay claims, but not too much money."

bloomberg.com/opinion/articl… 10/

J&J has vowed to appeal. If their appeal succeeds, it will be another blow against corporate accountability and against the bankruptcy system, both of which have are at their lowest ebb in living memory. Just the fact that J&J is still in business is remarkable. 11/

Poison talcum powder is only the latest salvo in J&J's war on women's reproductive organs. Just a year ago, the company was ordered to pay hundreds of millions for selling women vaginal meshes. 12/

It aggressively marketed meshes for incontinence and prolapse, long after it learned that these meshes could permanently fuse with patient's pelvic floors, leading to "severe pain, bleeding, infections, discomfort during intercourse."

theguardian.com/us-news/2022/a… 13/

J&J was also neck-deep in the opioid crisis, going to far as to commission a report from #McKinsey entitled "Maximizing Value of the Narcotics Franchise," on how to use its dominance of poppy-extract to corner the market on opioids:

pluralistic.net/2022/06/30/mck… 14/

It was the opioid sector that brought popular attention - and well-earned disgust - to the US bankruptcy. 15/

The criminal #Sackler family, owners of #PurduePharma and proprietors of #OxyContin, used a nakedly corrupt move to shift their bankruptcy proceeding to Judge Robert Drain of the Southern District of New York:

pluralistic.net/2021/08/07/hr-… 16/

Drain is notoriously tolerant of corporate crime and is an enthusiastic booster for the principle of using bankruptcies to escape consequences for corporate mass-murder. 17/

Which is exactly what the Sacklers did, cramming through a bankruptcy deal that let them walk away with billions, stiffing the survivors of their opioid business:

pluralistic.net/2021/07/29/imp… 18/

J&J told women to put carcinogens down their underwear. For *decades*. It gave tens of thousands of women ovarian cancer. Then it tried to use Texas's courts to walk away with billions. But this time, a court stopped them. 19/

This time there's no separate system of justice, like the one that gave the Sacklers billions in dirty money. This time, the company might just have to pay for its crimes. 20/

Image:
James Wagstaff (modified)
flickr.com/photos/jesse/2…

Mike Mozart (modified)
flickr.com/photos/jeepers…

CC BY 2.0
creativecommons.org/licenses/by/2.… 21/